Brazil Inflation Bets Ease as Activity Cools and Selic Holds at 15%

Overview

• Market economists cut the IPCA forecast for 2025 to 4.36% and for 2026 to 4.10% in the Banco Central’s Focus survey, while GDP projections stayed at 2.25% for 2025 and 1.80% for 2026.
• The Copom kept the Selic at 15% for a fourth meeting and signaled caution, as the Focus median now points to 12.13% by end‑2026.
• The BC’s IBC‑Br fell 0.25% in October versus September, below expectations, with 12‑month growth at 2.52% and a year‑on‑year gain near 0.4%.
• Interest‑rate futures declined after the weaker IBC‑Br, reflecting softer activity and reinforcing rate‑cut expectations for next year.
• High rates reshaped fund flows in 2025: net fundraising reached R$145.5 billion through November (down 42% year on year), with outflows from multimarket (R$61.7 billion) and equity funds (R$52.8 billion), and strong inflows to tax‑advantaged instruments including incentivized‑debenture funds (R$104.7 billion).